Abstract for: Strategic Analysis of Product Recovery Management by Using System Dynamics Approach

In this study, by using system dynamics approach we aim to investigate the profitability of a company if it is engaged in remanufacturing, which is the most advanced form of product recovery. Our motivation is to find out whether investing in remanufacturing is advantageous for a company/sector in terms of long term profitability and, what should be the quality and price levels of the remanufactured and newly manufactured products. The model shows that a company involved both in new and remanufactured versions of the same product, endogenously generates interesting customer-base dynamics. Different from the studies in the literature that deal with micro level models, we analyze the effects of being involved in remanufacturing of electronic products on the profitability of the firm at macro level, by taking into account the government incentives for the firms that perform product recovery.